The fact of the aging of the global population is something our readers are likely at least acquainted with. The phenomenon has arisen as life expectancy has lengthened even in developing countries and populations in developed countries often are not having enough children even to replace themselves. The result is that most national populations whose citizens or subjects are over 60 are quickly moving toward 30%. To put that number in historical perspective, The(CSIS) posits that, before the Twentieth Century, the percentage of inhabitants over 60 was 5-8%.
The CSIS released a sobering report earlier this year that measured the ‘Global Aging Preparedness’ (GAP) Index. The report stresses the demographic facts of the so-called ‘Silver Tsunami’ (a tide that can not now be turned, even if we all started having larger families) and the current economic situations of a number of countries both rich and poor, both developed and developing. So how did the US do?
The director of the index and report, Richard Jackson, provides a layman-friendly overview in this introductory video before we get to the numbers:
Like almost every one of the twenty countries studied, the US found its ranking on the ‘Income Adequacy Index’ inverted on the ‘Fiscal Sustainability Index.’ We ranked third on the former (Meaning: we have the third highest amount of income distributed across the population to deal with our aging citizens) but eleventh on the latter (Meaning: though we have high income, the costs and policies of the aging population will still cause notable stress to our economy).
In an, Mr. Jackson summed up the US’s position thusly:
The prospects in the U.S. are decidedly mixed. On the plus side, we are a partial exception to the hyper-aging trend sweeping the developed world. People assume that our age wave is particularly large, but in fact we are the youngest of the rich countries today and we’ll still be the youngest in 2030 or 2040. …
Again on the plus side, the U.S. also has some notable economic advantages: flexible labor markets, relatively low levels of elder dependency on public benefits, and a well-developed private pension system. Unfortunately, we also labor under some notable handicaps: a very low national savings rate, an extraordinarily high rate of growth in health care costs and a political culture that finds it difficult to make tradeoffs.
Something well worth noting as nonprofits, charities, and government agencies contend with The Great Recession and an aging population of Boomers moving toward retirements: The country whose position flipped to the two extremes of Income Adequacy and Fiscal Sustainability was Mexico. It ranked worst in adequacy yet second-best in sustainability, which might alleviate immigration pressures in the US as working Mexicans return to retire in their native country. Which might further reduce the US’s working-age/tax-paying population right when it needs to support retiring Boomers.
The full 64-page statistical report can be downloaded here.